Tailing waste produced by mining companies is best stored in water, the federal fisheries minister said Tuesday, defending a planned move by bureaucrats to reclassify 16 Canadian lakes as toxic dump sites.

Toxic mine tailings can be stored either in water or on land, Minister of Fisheries and Oceans Loyola Hearn said in the House of Commons, after the Conservative government was accused of putting fish and fish habitat at risk.

"It is much more responsible to store them in water," Hearn said.

"Any damage done in relation to fish or fish habitat has to be mitigated where there is no net loss to either fish or fish habitat. There is a major environmental study done before any go-ahead is given," he said, adding that "every aspect is covered" before anybody could be in a position to damage the environment.

A CBC investigation revealed on Monday that 16 Canadian lakes, including prime wilderness fishing areas from B.C. to Newfoundland and Labrador, are slated to be officially but quietly "reclassified" as mining dump sites.

Although the Fisheries Act prevents the disposal of harmful substances into fish-bearing waters, an inconspicuous subsection of the mining effluent regulations known as Schedule Two allows federal bureaucrats to redefine lakes as "tailings impoundment areas."

Where it applies, the regulation effectively absolves mining companies from having to build man-made containment ponds removed from natural water systems, allowing them to dump toxic mine tailings directly into reclassified lakes.

When asked by the opposition why the government continued to pander to mining companies at the cost of fish and their habitats, Hearn said the Conservatives were helping the mining industry progress in order to create jobs in areas where they are badly needed.

"Any water that is damaged in any way, there has to be assurance that there is no net loss to either fish or fish habitat. Mitigation has to occur, it always occurs, and when it doesn't occur, the company does not get a permit to move ahead with the operation," Hearn said.

Fish habitats at risk

Opposition MPs and environmentalists, however, say the process amounts to a hidden subsidy of mining companies that could devastate fish habitats and the environment.

"The reality is these Conservatives are giving those mining companies a huge subsidy by allowing them to use freshwater aquatic systems that are fish-bearing lakes as chief waste disposal sites," Nova Scotia MP Peter Stoffer said in the house on Tuesday.

"What they should be doing is having independent linings and holes filled with water, and put the tailings in those things, free and clear of any natural water system."

Water is used to manage mine tailings in situations where the tailings, particularly those that are sulphide-rich, could create acids that leach metals into the environment, according to Gordon Peeling, president of the Mining Association of Canada.

Ideally, mining companies would build containment ponds for their toxic waste, he said. However, the rugged terrain surrounding many mining operations doesn't always allow such structures to be built.

"The preferred solution is obviously a man-made structure, but when topography does not allow that, or when in actual fact a surface structure might be more risky … it may not be possible to find an appropriate level area that would allow that to be done," Peeling told CBC News Tuesday.